Coercive measures against the representatives of defaulting companies: Key clarification from the Abu Dhabi Court of Cassation

The General Assembly of the Abu Dhabi Court of Cassation has recently issued an important decision clarifying when coercive execution measures may be imposed on representatives of corporate entities that have failed to satisfy an executory judgment.

In its judgment dated 29 June 2026, the Court of Cassation held that, in appropriate circumstances, a creditor may seek a travel ban or an imprisonment order against the representative of a company that has defaulted on an executory judgment, without first obtaining a separate judgment establishing the representative’s personal liability, provided that the representative’s conduct is shown to have contributed to the obstruction of execution.

Previous conflicting positions

The decision resolves conflicting judicial decisions concerning the circumstances in which coercive measures may be imposed on the representative of a company that has failed to satisfy an executory judgment.

Under one approach adopted by the courts, creditors were required to establish fraud, abuse of authority, or other conduct giving rise to the representative’s personal liability under the Commercial Companies Law before coercive measures could be imposed on that representative. Under the competing approach adopted by the courts, the focus was instead on whether the representative’s conduct had contributed to preventing or delaying execution, without requiring proof of personal liability.

The General Assembly has now resolved that conflict.

The Court’s approach

The Court clarified that coercive measures may be imposed on the representative of a defaulting company where the failure of execution is attributable to that representative conduct, even in the absence of a separate judgment against the representative personally.

The relevant conduct does not need to amount to fraud or abuse of authority. It is sufficient that the representative’s acts or omissions have directly or indirectly prevented, delayed, or frustrated execution. Mismanagement may therefore be relevant where it contributes to the failure of enforcement.

Such conduct may arise before or during the execution process, provided that there is a clear causal link between the representative’s conduct and the failure or delay of enforcement.

The Court emphasised, however, that coercive measures are not automatic. The execution judge must assess whether the relevant conduct is attributable to the representative and whether that conduct caused or contributed to the obstruction of execution.

The decision therefore draws an important distinction between a company’s genuine inability to pay and a failure of enforcement caused or contributed by the conduct of its representative.

Practical implications

For creditors, the decision provides additional means of exerting pressure on representatives of defaulting companies by seeking coercive measures from the execution judge where there is evidence that the representative has obstructed, delayed, or frustrated enforcement.

For directors and managers, the decision reinforces the importance of maintaining proper records, preserving company assets, and engaging appropriately with execution proceedings. The relevant risk arises from conduct that interferes with enforcement, rather than from the company’s inability to satisfy its obligations.

The decision does not make company representatives personally liable for the company’s underlying debt, nor does it permit execution against their personal assets in the absence of a separate legal basis. It is therefore not a mechanism for piercing the corporate veil.

Conclusion

The decision is a significant clarification of enforcement practice in Abu Dhabi. It confirms that coercive measures may, in appropriate cases, be directed at the representatives of companies whose conduct obstruct or delay execution, without converting the company’s debt into a personal liability of those representatives. The Court’s approach therefore strengthens the tools available to judgment creditors, while preserving the need for an assessment of the specific facts of the case, a causal link between the representative’s conduct and the failed execution.

For further information or to discuss how this decision may affect an existing or anticipated enforcement matter, please contact Sherif Maher or Hesham El Samra at Clyde & Co.

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